Inflation

Reports on US consumer and producer prices, showed more deceleration that economists had estimated. As a result, the outlook for Fed policy shifted from two quarter-point hikes by mid-2027 to include the possibility of just one hike.

Kevin Warsh made his first appearance before Congress as Fed chairman Tuesday and noted that policymakers have no tolerance for high inflation, reiterating a vow to tame price growth.

From Capital Group to Insight Investment, Natixis and Pacific Investment Management Co., the message is the same: The sweet spot is the "belly," or the five-year area of the Treasury curve.

Christopher Phelan, President Donald Trump's nominee to chair the Council of Economic Advisers, declined to directly answer questions about recent inflation data and the effects of tariffs on consumers during a Senate confirmation hearing Thursday.

The Bureau of Economic Analysis' personal consumption expenditures inflation report for May showed that inflation had risen 4.1%, meeting elevated expectations and casting further doubt on the prospects of near-term interest rate cuts from the Federal Reserve.

The Treasury chief also predicted that the US economy will accelerate "on a non-inflationary basis for the rest of the year."

Newly minted Federal Reserve Chair Kevin Warsh will host his inaugural press conference on Wednesday. Bankers will be paying close attention to what he says — and how he says it.

A retrospective paper on the former Federal Reserve chair's tenure offers takeaways that speak directly to his successor's policy agenda.

Federal Reserve Vice Chair for Supervision Michelle Bowman said Friday that she believes price growth is still heading toward the central bank's 2% target when factoring out one-time shocks such as tariffs and elevated oil prices.

US 10-year yields are poised to snap their longest streak of declines in six months, advancing one basis point to 4.49% due to waning optimism that a peace deal may soon be reached to the end the war between the US and Iran.

The Federal Reserve Board governor is the latest Fed official to embrace the prospect of tighter monetary policy in response to rapidly rising prices that have taken hold in recent years.

Warsh takes over at a tense moment for the economy and the central bank. Price pressures have reaccelerated in recent months, driven by the impact of war in the Middle East on energy supplies.

Higher energy and commodity prices are intensifying headline inflation, which means inflation is headed is not headed in the right direction.

The 30-year rate increased six basis points to 5.18% on Tuesday, a level last seen on the brink of the global financial crisis in 2007, rising alongside US government yields across maturities.

Warsh won the race for Fed chair partly through sketching out a road map to rate cuts on the premise that an AI-driven productivity boom would keep inflation low.

Federal Reserve Gov. Stephen Miran Thursday said that the Iran war and tariffs will not have long-term impacts on inflation, but did say he is reconsidering his rate cut outlook for the year.

The setback pared a weekly gain for US government bonds sparked by an April 8 ceasefire agreement, which caused oil prices to tumble from near multiyear highs.

A 21.2% spike in the price of gasoline was the biggest contributor to a 0.9% increase in the Consumer Price Index in March, according to a Friday report from the Bureau of Labor Statistics. The agency said other price increases were largely contained.

Treasuries and gilts especially reflect unrealistic expectations that inflationary pressures will goad central banks into another 2022-style rate-hiking cycle.

Two former members of the Federal Open Market Committee said in interviews that they expect the Federal Reserve to keep rates steady amid uncertainty over the ongoing war with Iran and the resulting upward pressure on inflation.